Refundable Credit


DEFINITION of 'Refundable Credit'

A tax credit that is not limited by the amount of an individual's tax liability. Typically a tax credit only reduces an individual's tax liability to zero. Refundable credits go beyond this and so really can be considered the same as a payment.

BREAKING DOWN 'Refundable Credit'

In other words, you'll still get the credit even if you don't owe any tax. The earned income credit is a good example of a refundable credit in the United States.

  1. Longtime Homebuyer Tax Credit

    The Longtime Homebuyer Tax Credit was a federal income tax credit ...
  2. Lifetime Learning Credit

    A provision of the U.S. federal income tax code that lets parents ...
  3. Adoption Credit

    A federal tax credit that may be claimed by federal taxpayers ...
  4. Child Tax Credit

    A credit given to taxpayers for each dependent child that is ...
  5. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  6. Earned Income Credit - EIC

    A tax credit in the United States which benefits certain taxpayers ...
Related Articles
  1. Entrepreneurship

    Tax Credit For Plan Expenses Incurred By Small Businesses

    Determine whether your business is eligible to claim a tax credit for establishing a retirement plan.
  2. Savings

    Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  3. Mutual Funds & ETFs

    A Complete Guide to Tax Loss Harvesting With ETFs

    Using exchange-traded funds (ETFs) to harvest tax losses can be a smart way to maximize your portfolio's tax efficiency.
  4. Taxes

    Before You Visit Your Tax Preparer: Do This

    The earlier you start preparing your tax records and documents, the more likely you are to have a smooth tax return experience – and all the tax benefits you're due.
  5. Taxes

    How to Pay Minimal Taxes on Retirement Assets

    Withdrawing and spending during retirement can be complicated. Here are some tips on how to manage the process in the most tax-efficient manner.
  6. Markets

    Hillary Clinton Promises Free College and Higher Wages

    With income inequality on the rise, Hillary Clinton is running on raising the minimum wage, raising middle class wages, and providing free or low-cost college education.
  7. Retirement

    4 Unusual Ways to Boost Social Security Benefits

    Working the system to get the highest legal Social Security benefits just got harder. Two long-time benefits strategies expired with the 2015 budget bill.
  8. Taxes

    Why Delaware is the Most Business-Friendly State

    Incorporating your company in Delaware may give you the logistical, structural and judicial leg up you need to help your firm's chances of success.
  9. Home & Auto

    Special Benefits for First-Time Homebuyers

    To encourage Americans to buy their first homes, the government offers credits and tax breaks. Even better, you may not need to be an actual first-timer.
  10. Investing

    Carried Interest: A Loophole in America’s Tax Code

    With income inequality becoming an increasingly apparent problem in the U.S., it is time to start removing tax loopholes like carried interest.
  1. How does the American Housing Rescue and Foreclosure Prevention Act of 2008 affect ...

    The passage of the American Housing Rescue and Foreclosure Prevention Act of 2008 at the end of July 2008 made about $15 ... Read Full Answer >>
  2. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
  3. Are tax shelters legal in Canada?

    Most tax shelters are legal in Canada. However, there have been illegal tax shelter scams that the Canada Revenue Agency ... Read Full Answer >>
  4. How much does a dependent reduce your taxes?

    Each qualified dependent that you claim on your federal income tax form can reduce your taxable income by $3,950, as of 2 ... Read Full Answer >>
  5. What are the best free online calculators for calculating my taxable income?

    Free online calculators for determining your taxable income are located at, and Determining ... Read Full Answer >>
  6. Can I get a tax credit from conducting research and development?

    It is possible for a company to qualify for a research and development tax credit for conducting research and development. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  2. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses ...
  3. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  4. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
Trading Center